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Equitable relief against interference with membership rights.— Where, in an action for an injunction, it appears that “the defendants interfere with the plaintiffs in the exercise of their rights as members and officers of the corporation, exclude them from the rooms, prevent their attending meetings and voting, assume control of the corporation and divert its property, a suit in equity will lie. In such case an action for damages against the individual defendants, or a mere direction to recognize the plaintiffs as members, would not restore them to the full enjoyment of their rights, and the Supreme Court will exercise its equitable powers, and enjoin the defendants, declare their unauthorized acts void, compel the orderly and prescribed administration of the corporate affairs, and prevent the diversion of the funds and property of the corporation to any other purpose than that for which the corporation was organized.” Stein v. Marks, (1904) 44 Misc. 140, 89 N. Y. S. 921.
Adjustment of conflicting demands.— “It is well settled that when a person becomes a member of an associa and charter provides a method for adjusting difficulties and settling conflicting demands, he assents to the scheme adopted; and, in the absence of fraud or imposition or gross injustice, he will not be heard to impeach in the courts the validity of the decision against him, and the courts cannot examine the merits of the controversy.” National League, etc. v. Hornung, (1911) 148 App. Div. 355, 132 N. Y. S. 871.
Right of member to sue for corporation's property.- Where a membership corporation has subordinate unincorporated groups of members with something of self-government, but it does not appear to what extent they are amenable to the corporation, a member of one of such groups cannot, without showing derivative authority from the corporation, sue to recover from the treasurer of such group moneys alleged to belong to the group. Conboy v. Mathews, (1916) 160 N. Y. S. 538.
II. EXPULSION, SUSPENSION, AND RESIGNATION OF MEMBERS
Termination of membership in society or club: see Ann. Cas. 1913C 398 note.
Power to expel.— The right of a voluntary association to provide in its constitution or by-laws expulsion as a penalty for an infraction or disobedience of its law, seems to be well settled. National League of Commission Merchants v. Hornung, (1911) 148 App. Div. 355, 132 N. Y. S. 871.
General nature of power to expel. — “ The presumption is against the power to expel because it is in the nature of a forfeiture, which * * the law does not favor. White v. Brownell, 4 Abb. Pr. N. S. 162.” Matter of Reed, (1916) 95 Misc. 695, 160 N. Y. S. 907.
Grounds of expulsion.- Where the constitution of an incorporated club vests in its directors authority to expel or suspend a member “for cause,” but no precise definition is given as to what shall be deemed to constitute cause, it is “ generally agreed, however, both in this country and England, that sufficient cause must consist either of an offense against the member's duty as a corporator, or of a serious offense against his duty as a citizen, or of an offense against both duties . . . and in the nature of the case this must necessarily be so, since a club has no authority or jurisdiction to deal with a member except in his relation to the club. In order to justify expulsion therefore, a member must be charged with and proven guilty of conduct which can, in some fair sense, be said to be “ improper and prejudicial to the club.'” Matter of Barry, (1911) 147 App. Div. 704, 132 N. Y. S. 59, affirmed (1912) 204 N. Y. 669 mem.
The fact that a member of a mutual protective association composed of persons engaged in the business of buying and selling live stock, had misappropriated moneys received by him in business transactions and that his
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partner had been obliged to indorse notes to make good these misappropriations, which notes had not been met when due, was held to be sufficient ground for suspension. People v. East Buffalo Live Stock Ass'n, (1903) 88 App. Div. 619, 84 N. Y. S. 795, affirmed (1904) 179 N. Y. 598 mem.
The fact that a member of a social club composed of persons interested in the dramatic profession and the kindred arts of music, painting, sculpture and literature, published a magazine article reflecting upon the intelligence of actors, but not directed especially towards members of the club, is not sufficient cause to justify his expulsion, and his reinstatement will be compelled by mandamus. Matter of Barry, (1911) 147 App. Div. 704, 132 N. Y. S. 59, affirmed (1912) 204 N. Y. 669 mem.
“ It has been held that refusal of a treasurer in Journeyman Stone Cutters Association to surrender his books and papers to a special committee appointed to investigate a certain bill or account, when by the by-laws he was only required to surrender his books and papers to the trustees to be audited, or to be delivered to his successor, was not sufficient ground for suspension of membership. Connell v. Stalker, 21 Misc. Rep. 609.” Matter of Reed, (1916) 95 Misc. 695, 160 N. Y. S. 907.
The fact that a member presides over a meeting of a local body of an order at the time when a vote is taken to disobey the national body, is not alone ground for expulsion. Nor does the act of the presiding officer of a local body of an order in filling a vacancy created by the removal of an officer by such local body, render such presiding officer liable for such removal. Matter of Reed, (1916) 95 Misc. 695, 160 N. Y. S. 907.
Conformity of charges to by-laws.-A member of a corporation cannot be removed on charges which do not conform to the provisions of the by-laws touching the subject matter. McDermott v. Board of Police, (1857) 5 Abb. Pr. 422.
Necessity of notice.—“It is well settled that an association whose members become entitled to privileges or rights of property therein cannot exercise its power of expulsion without notice to the person charged, or without giving him an opportunity to be heard.” Wachtel v. Noah Widows, etc., Benev. Soc., (1881) 84 N. Y. 28, 38 Am. Rep. 478; Stein v. Marks, (1904) 44 Misc. 140, 89 N. Y. S. 921.
Sufficiency of notice.- Where it appeared that the by-laws of an incorporated benevolent society provided that a member should not be expelled without an opportunity to be heard, an expulsion after a trial by a committee of the society without notice of the charge preferred against the member in question, he having been notified simply to appear and pay a fine imposed for his alleged misconduct, was improper. People v. New York Benev. Soc., (1875) 3 Hun 361. Where the by-laws provided for ten days' notice of the hearing on charges against a member, a notice sent by mail which did not actually reach him as provided is insufficient although in due course of mail it should have been received within the proper time. People v. Hoboken Turtle Club, (1891) 60 Hun 576 mem., 14 N. Y. S. 76. The service of a notice to show cause why a member should not be expelled from membership in an incorporated Musical Mutual Protective Union ” did not constitute compliance with a by-law which provided that “no such expulsion, suspension or fine shall be made except on charges preferred, a copy of which shall be served upon the member so charged.” People v. Musical Mut. Protective Union, (1888) 47 Hun 273, 14 N. Y. St. Rep. 229.
Method of service of notice.- Where no method of service of a notice upon a member is prescribed, such service should be personal when the purpose is to deprive the member of his rights or property. People v. Hoboken Turtle Club, (1891) 14 N. Y. S. 76. See also Wachtel v. Noah Widows, etc., Benev. Soc., (1881) 84 N. Y. 28, 38 Am. Rep. 478.
Effect of failure to give notice.- In an action to recover the sum of money payable on the death of a member of a benefit association, a recovery was allowed although the deceased had been dropped from the association's
membership roll where it appeared that he had not been given notice of the intention so to do as prescribel by the by-laws of the association. Wachtel v. Noah Widows, etc., Benev. Soc., (1881) 84 N. Y. 28, 38 Am. Rep. 478.
Hearing.- Concerning an expulsion from a fraternal order, the court said in Matter of Reed, (1916) 95 Mi 695, 160 N. Y. S. 907: “ The petitioner was entitled to a fair trial before an impartial tribunal and if the method was not regulated by the laws of the association it should be analogous to ordinary judicial proceedings, so far, at least, as to permit substantial justice. Wachtel v. Noah, W. & 0. Ben. Soc., 84 N. Y. 28.”
Duty to demand hearing.-A member of a club is under no obligation to demand a hearing on charges against him looking toward his expulsion from membership, as the obligation on the part of the club to give him such notice is absolute. Loubat v. Le Roy, (1886) 40 Hun 546, 1 N. Y. St. Rep. 178.
Waiver of jurisdictional questions.-- Where a member of a trade union was informed that he was entitled to be represented by a lawyer before the executive board which was convened to hear charges against him, and stated that he did not desire counsel and was ready to proceed, he waived all preliminary questions and submitted himself to the jurisdiction of the board. People v. Independent Dock Builders' Benev. Union, (1914) 164 App. Div. 267, 149 N. Y. S. 771. So, irrespective of whether a membership corporation pursuant to a clause of its by-laws had a right to pass upon the financial claim of a nonmember against a member, a member who voluntarily submits the claims against him to the arbitration committee of the corporation and takes two successive appeals from the decision against him, assents to the jurisdiction and cannot question it in a subsequent action brought to restrain him from using the corporate emblem in his business after his expulsion. National League of Commission Merchants v. Hornung, (1911) 148 App. Div. 355, 132 N. Y. S. 871.
Proof.— “Where such serious results as expulsion from membership follow, those who allege irregularity, in the procedure to expel, must be held to strict proof, for no presumption will be indulged to support a forfeiture, which the law abhors. People v. Medical Society, 32 N. Y. 193.” Matter of Reed, (1916) 95 Misc. 695, 160 N. Y. S. 907.
Insanity as an excuse for failure to answer charges.-- Where a member of a benevolent association was expelled on charges preferred against him as required by the by-laws of the association, his failure to answer the charges is not excused by the fact that he was at the time “ apparently and actually of unsound mind.” Pfeiffer v. Weishaupt, (1885) 13 Daly 161.
Vote on expulsion.— Under General Corporation Law, $$ 34, 43, expulsion of a member must be done by a majority vote of the trial body, and there is nothing in the Membership Corporations Law to the contrary. Matter of Reed, (1916) 95 Misc. 695, 160 N. Y, S. 907.
Judicial review of proceedings.— “ The well-established rule governing interference by the courts with the internal affairs of voluntary associations and membership corporations in regard to their disciplinary proceedings is that the court will look into the record to see whether the member's proceeding has been in accordance with the constitution and by-laws of the organization, whether the charges are substantial, and whether the member has had fair notice and opportunity to be heard; in short, has the member received fair play? If so, the court will not substitute its judgment for that of the organization.” People v. Independent Dock Builders' Benev. Union, (1914) 164 App. Div. 267, 149 N. Y. S. 771. See also Williamson v. Randolph, (1905) 48 Misc. 96, 96 N. Y. S. 644. “ Courts should not, as a general rule, interfere with the contentions and quarrels of voluntary associations, so long as the government is fairly and honestly administered, and those who have grievances should be required in the first instance to resort to the remedies for redress provided by their rules and regulations.” Lafond v. Doems, (1880) 81 N. Y. 507. In Matter of Reed, (1916) 95 Misc. 695, 160 N. Y. S.
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907, the court, in discussing the right to review the act of the national body of a fraternal order to expel a member from the order, said, at page 704: " The fact that it is not proper for the court here to consider the weight of the evidence and to substitute its judgment thereon for the judgment of the national body, but if their determination of the petitioner's guilt of the charges is unsustained by any substantial evidence such determination should here be considered as contrary to law and natural justice and so subject to review and correction. Fritz v. Knaub, (1907) 57 Misc. 405, 103 N. Y. S. 1003, (affirmed 124 App. Div. 915) and cases cited.”
Mandamus to compel reinstatement.- Mandamus is the proper remedy to compel the reinstatement of a member who has been wrongfully expelled. See Matter of Haebler, (1896) 149 N. Y. 414, 44 N. E. 87; People v. New York Produce Exch., (1896) 149 N. Y. 401, 44 N. E. 84; People v. Erie County Medical Soc., (1865) 32 N. Y. 187; People v. New York Benev. Soc., (1875) 3 Hun 361; Weidenfeld v. Keppler, (1903) 84 App. Div. 235, 82 N. Y. S. 634, affirmed (1903) 176 N. Y. 68 N. E. 1125; Stein v. Marks, (1904) 44 Misc. 140, 89 N. Y. S. 921. A member of a corporation organized“ under the Act of 1848, entitled 'An Act for the incorporation of benevolent, charitable, scientific and missionary societies,"” who was expelled therefrom for failure to observe an unauthorized by-law of such corporation, was restored to membership by mandamus. People v. St. Franciscus Benev. Soc., (1862) 24 How. Pr. 216. See also People v. Erie County Medical Soc., (1857) 24 Barb. 570. Where a member of a musical union incorporated under L. 1864, ch. 168, was expelled as a result of proceedings conducted in disregard of the provisions of the corporation’s by-laws relating thereto, he is entitled to a writ of mandamus to compel reinstatement. People v. Musical Mut. Protective Union, (1889) 118 N. Y. 101, 23 N. E. 129. In a mandamus proceeding to compel the reinstatement of a member of a club who has been expelled for conduct prejudicial to the interests of the club, the relator is entitled to a trial of the issues as to whether he had been given reasonable notice to defend himself against the charge upon which he was expelled. People v. Uptown Ass'n, (1898) 26 App. Div. 297, 49 N. Y. S. 881.
Certiorari to review suspension.—A writ of certiorari will not lie to review the act of an incorporated medical society suspending a member for one year. People v. Dutchess County Medical Soc., (1895) 84 Hun 448, 32 N. Y. S. 415.
Equitable relief against order of suspension.-A person who was suspended from an unincorporated association for breach of a contract, after due notice and an opportunity for a hearing before the proper authorities, cannot, in an action to restrain the execution of the order of suspension, for the first time raise the question that the contract involved was illegal and unenforceable, as this point should have been raised on the hearing in the proceeding resulting in the suspension. Lewis v. Wilson, (1888) 50 Hun 166, 2 N. Y. S. 806, affirmed (1890) 121 N. Y. 284, 24 N. E. 474.
Damages for improper expulsion.-A member of a union organized as a membership corporation who is unlawfully expelled from membership is entitled to prove on the question of damages that by reason of such expulsion "he was discharged from the service in which he was engaged, and thus deprived of the income, which he otherwise would have received.” People v. Musical Mutual Protective Union, (1889) 118 N. Y. 101, 23 N. E, 129.
Expulsion” and “voluntary withdrawal.” - Where three ways are provided for the termination of membership in a corporation, viz.: (1) the death of the member; (2) his voluntary withdrawal from the corporation; (3) his expulsion, the three methods are separate and distinct and " voluntary withdrawal' cannot, by any reasonable use of language, mean “expulsion' and vice
Voluntary withdrawal' must be wholly the member's own free act. * Expulsion cannot be the voluntary act of the member, but necessarily must be hostile to him and against his will. Where one state of things exists the other cannot.” New York Protective Ass’n v. McGrath, (1889) 5 N. Y. S. 8, 23 N. Y. St. Rep. 209.
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Necessity of acceptance of resignation.—“In the absence of any law or rule to the contrary, a member of a membership corporation or of a voluntary association may resign at will by the simple announcement of his intention to do so, and no acceptance is required to give his resignation effect.” People v. New York Motor Boat Club, (1911) 70 Misc. 603, 129 N. Y. S. 365.
Reinstatement after resignation.— Where a member in good standing tenders his resignation by a letter in which is shown his intention to resign immediately, he at once ceases to be a member and is not entitled to be restored to membership by mandamus, though he attempted to withdraw
his resignation before it had been accepted. People v. New York Motor Boat Club, (1911' 70 Misc. 603, 129 N. Y. S. 365.
§ 1o. Directors and trustees. The directors of a membership corporation other than those named in its certificate of incorporation, shall be elected from among the members, by the members and by such other persons as are authorized, by or in pursuance of law, to vote therefor.
If a vacancy in the office of director of a membership corporation created under or by a general or special law, shall not be filled within six months after it occurs, either for want of a bylaw or other provision for filling the same; or if, by reason of the absence, illness or other inability of one or more of the remaining directors, a quorum of the board of directors can not be obtained, the remaining directors of such corporation, or a majority of them, may appoint a member of such corporation to fill such vacancy, and such appointment filed in the office of the clerk of the county in which such corporation is located, shall constitute such person a director of such corporation, until the next annual election of the directors.
A membership corporation, except a Young men's christian association, may file in the offices in which its certificate of incorporation is filed, a supplemental certificate designating not less than five nor more than fifteen of its directors to be the trustees of its property until the next annual meeting, and may by by-laws confer on such trustees any of the powers, duties or obligations of the directors of such corporation in relation to the care, custody or management of such property. At each annual meeting of the corporation thereafter the members thereof shall designate successors to the trustees in office.
This section was derived from the Membership Corporations Law of 1895, § 10, as amended by L. 1905, ch. 320, $ 1.
Term directors ” when used in relation to corporations : see GENERAL COBPORATION LAW, § 3, subd. 6.
Changing number of directors: see infra, § 14.